What is Replacement GAP insurance?

At its most basic level, if your car is written off, Replacement GAP insurance aims to pay the difference between your motor insurer's valuation of the vehicle and the cost of replacing your vehicle with a brand new version of the same vehicle at the time of claim. It's also a combination of the three main types of GAP insurance (Finance, Invoice & Replacement GAP insurance) thereby providing the best of all three cover levels, making it the highest level of GAP insurance available.

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Our customers saved

On average
£232

At most
£1,450

Largest claim paid

£48,859

Average claim paid

£11,186

How does Replacement GAP insurance work?

GAP insurance policies don't come much better than this.

Replacement GAP insurance is the highest level of GAP insurance cover available today. It's a combination of the three main types of GAP insurance: Finance GAP, Invoice GAP and Replacement GAP insurance - which means it provides the best of all cover levels.

In the event of your vehicle being declared a Total Loss (written off) through accident, fire, theft, or flood, Replacement GAP insurance aims to pay the difference between your motor insurer's valuation of the vehicle and THE HIGHER OF either:

  • The amount (if any) outstanding on finance at the time of claim EXCLUDING any Negative Equity brought forward from a previous vehicle (unless the optional "Negative Equity Cover" was purchased), OR
  • The ORIGINAL INVOICE PRICE that you paid for your vehicle first time around, OR
  • The cost of REPLACING YOUR VEHICLE with a brand new version of the same (or nearest equivalent) as your original vehicle - even if the replacement vehicle cost is MORE than you bought the vehicle for first time around.

For most people who go on to make a claim, having their motor insurer's valuation of the vehicle topped up to the cost of replacing their vehicle with a brand new equivalent at the time of claim by way of a Replacement GAP insurance claim pay-out, would leave them in the position of being able to both clear any outstanding finance and have money left over - more money than they would have had left over than with any other type of GAP insurance - to put towards the cost of their next car.

In order to determine whether this type of cover is suitable for your needs, either call us on 01484 490095 or contact us here.

Replacement GAP claim example

Policy documents

Add a little TLCc to your GAP insurance:

Total Loss Courtesy car

Total Loss Courtesy Car

If your vehicle is damaged in an accident, your motor insurance policy will normally provide you with a courtesy/hire car whilst the damage to your vehicle is being assessed.

If they determine that your vehicle is repairable, you would normally have the use of that courtesy car for the duration of the repairs.

However...

If they decide that the damage to your vehicle is beyond repair and subsequently declare it a Total Loss (they write it off), you would then not normally be entitled to their courtesy car any longer (unless you've paid them an additional premium for such entitlement) and, it would be withdrawn: leaving you without the use of a vehicle.

Depending on how much longer they take to settle your claim, you might be without a vehicle for a number of days - or even weeks!

Building in Total Loss Courtesy Car cover (TLCc) to your GAP insurance policy with us, means that in the event your car is declared a Total Loss, we will provide you with a courtesy car for you to use for up to 28-days.

TLCc Cover Features:

The car provided:

  • Will be of a similar sized engine to Your vehicle that was deemed a Total Loss (limited to a maximum of a 2.0 litre manual car or equivalent)
  • Will be insured. Please note that an excess (normally £250) will apply to accidents/claims occuring during your use of the courtesy car. Exact terms will confirmed prior to you accepting delivery of it.
  • Will be able to be delivered to and collected from your home or place of work.

For more information please review the Ts & Cs of our GAP insurance policies here, or generate a quote.

If your car's written off, we'll keep you moving!

Relaxing in a car, feet out of the window

Do I need Replacement GAP insurance?

GAP insurance is an entirely optional form of insurance and some people will have a greater need for it than others.

Without GAP insurance in force, if your car is written off, you'd only have your motor insurer's valuation of the vehicle coming your way. If you have finance outstanding on your written-off vehicle, your motor insurer's valuation of the vehicle may not be sufficient to clear the outstanding balance, in which case, you'd have to use your own funds to both clear the remaining finance on the written off vehicle and fund a replacement vehicle and it's entirely possible that by the time of claim, a brand new version of the same vehicle might then be more expensive than you paid for your original vehicle.

This is where Replacement GAP insurance goes above and beyond, by not only aiming to cover the difference between your motor insurer's valuation of the vehicle and the original invoice price that you bought your vehicle for, but also covering any amount by which the cost of a brand new version of the same (or nearest equivalent) vehicle has increased.

In short... if you can comfortably afford to stand the combined cost of clearing any finance outstanding (where applicable) and replacing your vehicle in the event it's written off - including covering any increase in the cost of a brand new equivalent - you probably don't need GAP insurance. However if you could not comfortably afford to replace your vehicle or, you'd prefer that your own savings were not 'hit' by the cost of replacing your vehicle if it was written off, therein lies the need for Replacement GAP insurance.

Am I eligible for Replacement GAP insurance?

You can buy Replacement GAP insurance for up to three years in duration to cover a New car that:

  • Is covered by a comprehensive motor insurance policy.
  • You are the very first and only registered keeper of.
  • Is less than 90-days old at the start date of this policy.
  • You have not yet taken delivery of or, you took ownership/delivery of within the last 90-days.
  • You have NOT changed in any way from the vehicle manufacturer's standard specification, unless the vehicle has been modified for mobility purposes. This would include changes to the bodywork, such as spoilers or body kits, changes to the suspension or brakes, and changes affecting performance such as engine management. Graphics applied to your vehicle are acceptable.
  • Has not previously been declared a Total Loss and is not already the subject of a previous incident or existing motor insurance claim which could yet result in it being declared a Total Loss.
  • Is registered in the UK.
  • Was bought for no more than £50,000.
  • Is not a commercial vehicle.
  • Is not being used for: rallying, racing, any competitive events, off road (including green laning), emergency services use (blue lights), hire (including private hire, taxis and chauffeur) or for driving school tuition.
  • Is not already covered by a GAP insurance policy.
  • Was bought cash outright, personal loan (secured or not), or financed by way of a HP, PCP or Conditional Finance Agreement.
  • Is not a specifically excluded vehicle.
  • Is not a van, car derived van, motorcycle, motorhome or campervan.

So long as you:

  • Are a permanent resident of the United Kingdom (England, Wales, Scotland, Northern Ireland, Channel Islands and the Isle of Man), or a UK registered company.
  • Bought the vehicle from a VAT registered motor dealer.

You can NOT buy Replacement GAP insurance for a vehicle that:

  • Is not covered by a comprehensive motor insurance policy.
  • You are not the very first registered keeper of.
  • Is more than 90-days old at the start date of this policy.
  • You took ownership/delivery of more than 90-days ago.
  • You have changed in any way from the vehicle manufacturer's standard specification, unless the vehicle has been modified for mobility purposes. This would include changes to the bodywork, such as spoilers or body kits, changes to the suspension or brakes, and changes affecting performance such as engine management. Graphics applied to your vehicle are acceptable.
  • Has previously been declared a Total Loss or, is already the subject of a previous incident or existing motor insurance claim which could yet result in it being declared a Total Loss.
  • Is not registered in the UK.
  • Was bought for more than £50,000.
  • Is a commercial vehicle.
  • Is (or will be) used for: rallying, racing, any competitive events, off road (including green laning), emergency services use (blue lights), hire (including private hire, taxis and chauffeur) or for driving school tuition.
  • Is already covered by a GAP insurance policy.
  • Is the subject of a Contract/Lease Hire Agreement.
  • Is a van, car derived van, motorcycle, motorhome or campervan.
  • Is a specifically excluded vehicle.

Key features of Replacement GAP insurance

  • Combined Finance, Invoice & Replacement GAP - Covering up to the greater of either the outstanding finance, original invoice price or replacement vehicle price
  • Available for Cars, up to 1 month old, purchased from an authorised dealer or finance house.
  • NO Market Value clauses.
  • Ability to cancel the policy at any time and receive a daily pro-rata refund of unused premium (a cancellation fee may apply)
  • CASH payout to you rather than to a nominated dealer, leaving you free to choose the provider of your replacement vehicle
  • ALL named drivers on the Motor Insurance policy, covered.
  • Available for Cars bought for up to £50,000.
  • OPTION to include cover for up to £2,000 of negative equity brought forward from your previous vehicle.
  • OPTION to include the provision of a courtesy car for you to use for up to 28-days in the event your vehicle is a declared a total loss.
  • Underwritten at Lloyd's by Arch Managing Agency Limited.
  • Pays up to £250 towards the excess on your Comprehensive Motor Insurance policy.
  • FREE transfer of any unused premium on to a new policy on a replacement vehicle.
  • NO right to revalue the invoice price of your vehicle at the time you bought it.
  • Policy durations of up to 3 years available.
  • Claim Limits of up to £50,000 available.
  • FREE policy amendments.
Feature
Details

A-Rated Insurer?

ALL named drivers on your motor insurance policy, covered?

NO Pre-Approval clause with penalty?
Some policies from some GAP insurance providers strictly enforce that you must seek the claim administrator's approval before accepting an offer from your motor insurer, with you forfeiting some or all of your GAP insurance claim in the event that you don't.

Total Loss Courtesy Car available?
Provides the use of a courtesy car for up to 28-days in the event your motor insurer declares your vehicle a Total Loss and withdraws their courtesy car provision


Subject to an additional fee being paid.

Ability to cover Negative Equity brought forward from a previous vehicle?


Max £2,000
Subject to an additional fee being paid.

Initial Cooling Off Period?
Cancel within this period and receive a full refund if no claim has been made

30-days

Pro-Rata rebate of unused premium if you cancel outsde of the initial Cooling Off Period?
If you sell your vehicle and cancel the policy early with no claim having been made, do you get some of your money back?


Daily Calculation

Pays out in cash to the policyholder?
Some Replacement GAP insurance policies from some providers will contractually oblige you to allow them to source your next vehicle for you. Others may insist that you deal with a motor dealer that they nominate to source your next car. Thereby denying you the flexibility to choose which car you get next, from which dealer or even whether you wish to use the funds towards a new car at all.

After all parties with an interest in the vehicle have been paid (e.g. a finance company), any/all excess funds are paid directly to the policyholder leaving them free to use those funds against the cost of sourcing any vehicle from any dealership of their choice.
Cover for dealer fitted accessories?

Up to £1,500 worth
Transferrable?
If you sell your vehicle and have not claimed on your GAP insurance policy, can the unused portion be transferred forward on a new vehicle?
We will cancel your policy and allow you to transfer forward, the financial value of the remaining period of your cover, against the cost of a new policy on a new vehicle. No cancellation, transfer or admin fees will apply.
Will pay towards your Motor Insurance excess in the event of a successful Total Loss claim?

£250
NO Market Value clauses?
A Market Value clause permits the claim administrator to reduce the amount of your claim based either on their belief that you paid too much for it when you originally bought your vehicle or, if your motor insurer pays out less than they think your car is worth at the time of claim - potentially both. Where possible you should avoid any GAP insurance policy that has one or more market value clauses permitting such a reduction in the amount of claim.

None
Maximum age of vehicle that can be covered?
90-days old
Maximum vehicle value?
£50,000
Maximum Claim Limit available?
(Subject to the vehicle value)
£50,000
Maximum duration of cover available?
3 Years

Is there a cancellation Fee if cancelled outside of the initial Cooling Off Period?


£30.00
Waived if a new policy is purchased.

How long after taking delivery of the vehicle, do have to buy GAP insurance?

90-days
Available for both New and Used vehicles?

Brand New, 1st keeper only.

Allows for vehicles to be modified?

Recent Replacement GAP insurance claims

Below are a selection of our most recent Replacement GAP insurance claims:

Volvo S60

Volvo S60
Vehicle Purchased
Invoice Price
GAP Claim
GAP Payout
September 2020
£50,645
April 2024
£30,029
Length of ownership:
43 Months
Rate Of Depreciation:
An average of £698.35 per month*
Total Depreciation:
59.29% of its original Invoice Price during the 43 months it was owned.*
Policy Cost:
The policy cost £403.27 (1.34% of the amount the policy paid out.)

BMW 1 Series

BMW 1 Series
Vehicle Purchased
Invoice Price
GAP Claim
GAP Payout
January 2022
£34,800
February 2024
£10,170
Length of ownership:
25 Months
Rate Of Depreciation:
An average of £406.78 per month*
Total Depreciation:
29.22% of its original Invoice Price during the 25 months it was owned.*
Policy Cost:
The policy cost £269.35 (2.65% of the amount the policy paid out.)

Audi Q3

Audi Q3
Vehicle Purchased
Invoice Price
GAP Claim
GAP Payout
May 2023
£38,795
December 2023
£3,795
Length of ownership:
7 Months
Rate Of Depreciation:
An average of £542.18 per month*
Total Depreciation:
9.78% of its original Invoice Price during the 7 months it was owned.*
Policy Cost:
The policy cost £302.62 (7.97% of the amount the policy paid out.)

Mazda CX-30

Mazda CX-30
Vehicle Purchased
Invoice Price
GAP Claim
GAP Payout
January 2023
£29,950
November 2023
£3,710
Length of ownership:
10 Months
Rate Of Depreciation:
An average of £371.00 per month*
Total Depreciation:
12.39% of its original Invoice Price during the 10 months it was owned.*
Policy Cost:
The policy cost £269.35 (7.26% of the amount the policy paid out.)

Renault Clio

Renault Clio
Vehicle Purchased
Invoice Price
GAP Claim
GAP Payout
November 2020
£16,090
October 2023
£7,749
Length of ownership:
35 Months
Rate Of Depreciation:
An average of £221.40 per month*
Total Depreciation:
48.16% of its original Invoice Price during the 35 months it was owned.*
Policy Cost:
The policy cost £248.03 (3.20% of the amount the policy paid out.)

Land Rover Range Rover Evoque

Land Rover Range Rover Evoque
Vehicle Purchased
Invoice Price
GAP Claim
GAP Payout
April 2017
£37,500
September 2023
£31,500
Length of ownership:
77 Months
Rate Of Depreciation:
An average of £409.09 per month*
Total Depreciation:
84.00% of its original Invoice Price during the 77 months it was owned.*
Policy Cost:
The policy cost £350.00 (1.11% of the amount the policy paid out.)

Audi A6

Audi A6
Vehicle Purchased
Invoice Price
GAP Claim
GAP Payout
October 2018
£20,500
August 2023
£18,004
Length of ownership:
58 Months
Rate Of Depreciation:
An average of £310.41 per month*
Total Depreciation:
87.82% of its original Invoice Price during the 58 months it was owned.*
Policy Cost:
The policy cost £420.00 (2.33% of the amount the policy paid out.)

Volvo XC60

Volvo XC60
Vehicle Purchased
Invoice Price
GAP Claim
GAP Payout
March 2020
£57,745
May 2023
£15,497
Length of ownership:
38 Months
Rate Of Depreciation:
An average of £407.82 per month*
Total Depreciation:
26.84% of its original Invoice Price during the 38 months it was owned.*
Policy Cost:
The policy cost £362.94 (2.34% of the amount the policy paid out.)

Skoda Kodiaq

Skoda Kodiaq
Vehicle Purchased
Invoice Price
GAP Claim
GAP Payout
September 2020
£28,195
January 2023
£7,237
Length of ownership:
28 Months
Rate Of Depreciation:
An average of £258.46 per month*
Total Depreciation:
25.67% of its original Invoice Price during the 28 months it was owned.*
Policy Cost:
The policy cost £235.10 (3.25% of the amount the policy paid out.)

Mercedes-Benz E-Class AMG-Line

Mercedes-Benz E-Class AMG-Line
Vehicle Purchased
Invoice Price
GAP Claim
GAP Payout
September 2020
£33,670
November 2022
£21,095
Length of ownership:
26 Months
Rate Of Depreciation:
An average of £811.35 per month*
Total Depreciation:
62.65% of its original Invoice Price during the 26 months it was owned.*
Policy Cost:
The policy cost £311.72 (1.48% of the amount the policy paid out.)